Could a bicycle prescribed for rehabilitation after knee surgery qualify for Texas' therapeutic-device sales-tax exemption?

Plain-English summary

The Comptroller reconsidered and reversed its earlier conclusion that the bicycle could not qualify as a therapeutic appliance or device.

Rule 3.294 defined a therapeutic appliance or device as an item designed to alleviate pain or for use during treatment or cure of human sickness, disease, suffering, or deformity. Such an item could be sold, leased, or rented without sales tax when the purchaser presented a doctor's prescription.

For the bicycle recommended after knee surgery, the buyer could purchase it tax-free by giving the seller a doctor's prescription or letter that specifically stated the medical problem and explained how the bicycle would alleviate the problem or be used during treatment.

What this means for you

A general recommendation was not the formulation described in the letter. The medical document needed to connect the diagnosed problem with the bicycle's therapeutic or treatment use.

Common questions

Had the Comptroller previously denied the exemption? Yes, in an October 2, 1991 letter.

Did the Comptroller change its answer? Yes. After further review, it said the bicycle could qualify.

What had to be in the doctor's document? The medical problem and how the bicycle would alleviate it or be used during treatment.

Could the bicycle then be purchased tax-free? Yes, with that prescription or letter.

Citations and references

• 34 Tex. Admin. Code Rule 3.294

Source

• STAR search: https://star.comptroller.texas.gov/search?doc_type_code=L&tax_type_code=SST
• Opinion: https://star.comptroller.texas.gov/view/9204L1164D11

Original ruling text

April 9, 1992

Dear **:

We have reconsidered a taxability issue that you raised in a
letter to our office dated September 25, 1991.

You asked if a bicycle could be purchased tax free if you
presented the seller with a doctor's letter recommending the
use of the bicycle for rehabilitation after knee surgery.

Rule 3.294 defines "therapeutic appliance or device" as any
item designed to alleviate pain or designed for use during
the treatment of cure of human sickness, disease, suffering
or deformity. Sales tax is not due on the sale, lease, or
rental of therapeutic appliances or devices if the purchaser
presents a doctor's prescription.

In our letter dated October 2, 1991, we responded that the
bicycle did not qualify as a therapeutic appliance and could
not be purchased tax free.

After further review, we have determined that the bicycle
could qualify as a therapeutic appliance or device.

If you give the seller a doctor's prescription or letter
that specifically states the medical problem and how the
appliance will alleviate that problem or be used during
treatment, the bicycle may be purchased tax free.

We apologize for any inconvenience our letter may have
caused you.

If you have any questions, please write me at the Tax
Administration Division or call me toll free at
1-800-531-5441, extension 3-4565.

Sincerely,

Larry Koenig
Tax Administration Division